I Like Sports

In the end, the Fed minutes were pretty anodyne, acknowledging a few of the issues noted in this space yesterday while stopping well short of offering any specific recommendations. The BOE was perhaps a little more spicy, with yesterday's minutes confirming that a few MPC members are inching a little closer to wanting to raise bank rate (why does the BOE never prefix this with a definite article?)

Nevertheless, short sterling is still residing on the Island of Misfit Trades; the June 15 contract, for example, is more or less smack dab in the middle of the six month range, and above the starting point for the year:

On the other hand EUR/GBP, mentioned in this space last week, has broken down to its lowest level in more than a year. It's pretty rare these days to hear the phrase "the FX trade looks like the best one", but in this case it might be true.

Of course, the whole concept of the "best trade" is looking a bit specious these days, such is the difficulty than many punters are having. It's not the worst time in the world to be out of a professional trading seat, as for various reasons it's a lot easier to ignore the screens and go cycling when the only investor you have to answer to is yourself. How long the novelty lasts remains to be seen, of course; indeed, Macro Man can imagine other punters looking at the market and having a George Costanza-style instrosepction:

Apparently, though, George wasn't the only one who like sports. A little-known part of the Abenomics revival plan includes a proposal to increase the number of pro baseball teams by 33%. Apparently, the gist of the idea is to make peripheral towns more appealing and to boost their economies with the success of the local team. Hey, how's that working out for Jacksonville?

In any event, Macro Man wondered if sports could address the ills of some other economies:

Canada wants higher inflation and a weak exchange rate. Encourage local teams to employ only foreign stars, who will spend lavishly to entertain themselves and then send the bulk of their paychecks back home, thus weakening the CAD. It's not like Canadian teams have won anything in the last couple of decades by employing...errr......Canadians.

Italy should do the opposite, encouraging all Serie A teams to sell their fancy foreign players to Man City and PSG. The proceeds will help the country's balance of payments and more spots for local players might put a dent in that 12.7% unemployment rate.

China should develop an interest in cricket and start a multi-tiered league across the country. Lacking local talent to play, perhaps they could import swathes of players from India (America has already started this with baseball.) Best of all, these thousands of players would require accommodation; fortunately, China has blocks of empty apartment buildings just waiting to house them!

Australia wants a weaker exchange rate. Perhaps the government could institute an industrial policy of bidding for American sports franchises whenever they come up for sale. If the LA Clippers, the NBA's worst franchise facing a forced sale, could fetch $1 billion, just imagine how many AUD would need to be sold to purchase a proper team. Given that Australia has produced players for the NBA, Major League Baseball, and even the NFL, why not do a little covert intervention and give the folks down under yet more sports to follow?

Russia should consider holding a glamorous international sporting event, say the Olympics, to convince the world that they're really good chaps after all, and while the assembled grandees are still traveling back home make a land grab from one of its neighbours. Hmmm....on second thought, this one's too outlandish. It would never work.